The Lexus LF-SA concept could preview a future model that would be a rival to BMW Group's Mini, the Audi A1 or Daimler's Smart ForFour minicar, reports said.
Lexus said it will unveil the LF-SA at the Geneva auto show on March 3 but declined to give any details other than issuing a teaser picture of the concept.
The car could go on sale in 2018 and would slot below the CT, the brand's best-seller in Europe, reports said. Like the CT, a production LF-SA would be offered only with a hybrid powertrain, the reports said.
A subcompact based on the LF-SA could give Lexus a sales boost in Europe where the brand has failed to make headway against German premium rivals.
Lexus sold 31,079 cars in the EU and EFTA markets last year, up 30 percent on the year before, according to industry association ACEA. The brand had a market share in Europe of just 0.2 percent compared with Audi's 5.6 percent, BMW brand’s 5.5. percent and Mercedes brand's 5 percent.
The CT was Lexus's best-selling car in Europe last year with sales up 9 percent to 10,140, according to JATO Dynamics market researchers.